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Mr. David Shaw: The point that the auditor makes in his report is that Westminster councillors made not a legal decision, as he alleges, but a political decision. The hon. Gentleman and the hon. Members for Newbury (Mr. Rendel) and for Holborn and St. Pancras (Mr. Dobson) have all told us that they have been members of council groups that have made political decisions.

Mr. Gerrard: We are politicians and we make political decisions. But political decisions that are made by local authorities must be made within a laid-down legal framework. That framework makes it clear that political decisions must not be made behind closed doors for party political purposes. Public funds should not be used for purposes that the law does not allow. The district auditor is saying that public money was misused.

Ms Hodge: Does my hon. Friend agree that Conservative Members are deliberately getting things wrong? The primary purpose of the Westminster decision was political. [Interruption.] The purpose of other decisions that were taken in a political context was electoral advantage. [Interruption.] The by-product of such decisions is electoral gain, but it is not the primary purpose.

Mr. Gerrard: I agree that--[Interruption.]

Madam Deputy Speaker: Order. There is an increasing tendency for seated interjections, which are not confined to one side of the House. From whichever side they come, I deplore them.

Mr. Gerrard: There is a deliberate attempt to misunderstand. There are many Members who have been in local government. They understand the constraints within which local government works. They understand also the difference between making a decision that it is hoped will be electorally popular and making a decision improperly. There are clear distinctions between the two approaches.

Ms Armstrong: Is not the real issue that the Westminster city council solicitor told the then leader of the council that

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That was the council's primary duty as a housing authority. Therefore, the needs of the homeless had to come first, whatever the political considerations.

Mr. Gerrard: Absolutely. That is an exact example of the legal constraints within which councils must work. Westminster was operating in a completely different league from other councils. Events in Westminster were the culmination of the Tory attitude to local government over some years. Since the Government took office in 1979, local government powers have been reduced. Local government spending has been cut. There has been increasing pressure on local authorities. Any local authority that was not Tory-controlled was regarded as an enemy, as an authority to be crushed. It was felt that it should have as little power and influence as possible.

As we have seen fewer and fewer Tory councils--Westminster is the flagship council among them--the attitude of hanging on at all costs has prevailed. The Tories think, "It does not matter what we do because it is vital that we stay in control. Never mind whether what is being done is immoral or illegal. Those considerations must be subjugated in our determination to retain political control." That is what was going on. If Ministers are not prepared to condemn what took place in Westminster, ultimately they will be condemning themselves.

7.7 pm

Mr. David Shaw (Dover): Before commenting on Westminster city council, I shall take up some of the remarks of the hon. Member for Holborn and St. Pancras (Mr. Dobson), who referred to my involvement in Monklands. Before my involvement in that area, wrongdoing was suppressed and covered up. Subsequent to my involvement, the people were told a great deal about what went on.

People were told about an ombudsman's report that found against the council. There was a council housing fiddle, and a councillor's friend had precedence over a disabled elderly couple. They were told also about two industrial tribunals before which hearings had gone against the council because councillors had conducted secret meetings. We have been told that Labour councillors do not meet in secret, but that is what happened at Monklands.

The people of Monklands were told about a taxi licensing fraud. They were informed of two police investigations.

Ms Armstrong: Is this in order?

Mr. Shaw: The hon. Member for Holborn and St. Pancras referred to my work in Monklands. I am replying to his comments. The hon. Gentleman was held to be in order.

Ms Armstrong: Is the hon. Gentleman denying the words of the judge who was called in by the Secretary of State for Scotland, who said of the hon. Gentleman:

How does the hon. Gentleman expect us to take him seriously?

Mr. Shaw: I thank the hon. Lady for repeating what the hon. Member for Holborn and St. Pancras said earlier.

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I shall return to that, but the hon. Lady has interrupted me in the middle of pointing out my success in terms of uncovering what went on in Monklands. The reference she quoted was from a report solely on employees. It did not refer to the ombudsman's report on housing, industrial tribunals, taxi licensing fraud or the two police investigations in Monklands.

In addition, I personally uncovered losses of £6 million over three years in five council-owned companies in Monklands. With interest, those losses will rise to about £30 million over the next 10 years.

Ms Glenda Jackson: Will the hon. Gentleman give way?

Mr. Shaw: Not for the moment; I shall make some progress.

When costs are included, those losses of £30 million in Monklands will probably exceed any surcharge in Westminster. We need to put the Westminster surcharge into perspective. No councillors in Monklands have yet been surcharged, despite all the political decisions that were taken by Labour party groups behind closed doors.

Labour party rules in Monklands stipulate that, if a decision is taken by a Labour group behind closed doors, every Labour councillor must abide by that decision or be thrown out of the local Labour party. Such a rule is common among Labour parties up and down the country. The Labour whip is enforced rigidly on political decisions.

We need no lessons in Westminster supporting the argument that a political decision was taken. Labour councillors make political decisions every day of the week, and they enforce them rigidly. In many cases, those decisions result in financial losses. For some reason, however, the district auditor in Westminster has taken a different view of a particular political decision from the views of district auditors elsewhere in the country, who do not surcharge Labour councillors who lose vast amounts of money.

In Lambeth and other councils, the Labour party has lost vast sums of money--far more than Westminster--yet, for some reason, the district auditors seem to leave those Labour councillors alone. However, the public know the truth.

The Labour party in Monklands has backed me, as it has barred every Labour councillor in Monklands from holding office in the new council. The Labour party backed me in Monklands, because it finally had to admit that I had been right all along.

I now turn to the QC's report. A QC decided that, although the council employed 45 family members of councillors, he could not find anything wrong. He did not determine in his report that there was nothing wrong or that my evidence was wrong. He said that he simply could not find anything wrong.

Mr. Gordon Prentice: On a point of order, Madam Deputy Speaker. Surely the hon. Gentleman's speech cannot be in order. He has not made a passing reference to Monklands; his whole speech is about Monklands.

Madam Deputy Speaker: I understand that allusions were made to the hon. Gentleman's role in Monklands.

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In those circumstances, he has some right to make his own case, but not at enormous length. However, he should now return to the main subject of the debate.

Mr. Shaw: My comments on Monklands would have been shorter but for the intervention by the hon. Member for North-West Durham (Ms Armstrong) and the point of order that has just been raised.

In conclusion, in his report, which cost the taxpayer £50,000, the QC said that he was unable to go along with my suggestion of proving his findings by reference to other councils' practices. It is a strange lawyer who does not look at precedents.

I should like to turn to Westminster council, but before doing so, I make a declaration. I understand from the rules of the House that I am under no obligation to make the following declaration, but it could be relevant to the debate. I have always wanted to make very full disclosure. I should like to make it clear to the House that I have known John Porter for some 14 years, and I have had business connections with him since before I entered the House of Commons. I have had very little contact with his family.

The House should also know that, much to my surprise, I have known a former Labour councillor on Westminster council. I knew him at a social event that I attended in the past few years. I have also known one or two Conservative councillors on Westminster council. In my experience, none of the people involved in the case are serial killers or should be compared with them, as the hon. Member for Liverpool, West Derby (Mr. Wareing) said earlier in the debate. None of the people I have just mentioned has asked me to make a speech; nor have they been involved in its preparation.

I lived in Westminster for four years. I voted in the 1990 council elections, and I voted for a policy of selling council houses. Westminster had a low proportion of home ownership, and the council owned far too many houses. During the four years that I lived in Westminster, it was a clean, well-run council, and there was a high turnout in council elections.

We retained control of Westminster council not because of gerrymandering, but because people did not want Labour in power. There was one of the highest turnouts in council elections that many people had seen for many years. For various reasons, I now live in Lambeth, and I am saddened by the fact that in Lambeth even the road signs are gerrymandered. Lambeth has red road signs. The Labour party is trying to put its party colours all over Lambeth, along with the council flats and the unemployment that it has gerrymandered into Lambeth.

If the surcharge imposed on Westminster councillors is confirmed by the High Court, it will be in complete contrast to all previous cases. Legal advice has been taken from eminent QCs at every stage. Officers were most careful, as were members of the council. After the initial decision to sell council houses--which I understand was a political policy decision similar to those made in every political party group on every council--the officers were the only people involved in the detailed implementation of the policy. They quite properly prevented councillors from interfering with individual sales, and restricted them to policy decisions.

I shall address the main part of my speech to the objectors. Who are the objectors to the accounts that set the district auditor going? At one time, there were

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13 objectors to the accounts of Westminster city council, but now there are only four. Nine of the objectors have pulled out. The ordinary members of the public have pulled out, and there are now only four Labour activists: a Labour councillor, a former Labour councillor, an activist in the Labour party, and a lifelong Labour party member.

Those four Labour activists are financed by the trade unions and Labour party supporters through the Westminster Objectors Trust. The trust is run by Sir David Puttnam, the millionaire film director who helps the media-friendly image of certain people's actions, Baroness Jay, and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). It is a totally Labour-run activity.

Let me turn to the quality of the objectors. One objector who has withdrawn was the former girl friend of the main objector, Neale Coleman, but as soon as he dumped her, she ceased to object to the accounts of Westminster city council. That is how strong her objection was: as soon as she was dumped by the original objector, she was no longer interested in objecting herself. That is very relevant, because, as I shall demonstrate, the objections are based on corruption, and there is no substantive backing for them.

According to one of the objectors, £200,000 has been raised from trade unions and Labour party supporters to fight the battle. That battle is being fought on political grounds, which is one reason why two churchmen withdrew their objections: they did not want to become involved in the heavy politics of Labour party trade unionism. I understand that Unison, the Labour-supporting trade union that does not encourage Labour Front-Bench spokesmen to declare their donations, has donated £21,000 to the Labour battle--as it is seen--in Westminster.

All four of the Westminster Labour objectors are company directors as well as being Labour party activists. The primary objector, Mr. Neale Coleman, is a former Labour Westminster councillor who has a company--No. 2502022--known as Paddington Consultancy Partnership Ltd., with Mr. Stephen Hilditch, secretary and director of the Westminster Objectors Trust. Councillor Peter Bradley, another objector, owns company No. 2844795, which goes by the name of Millbank Consultants Ltd. In due course, I shall explain how those companies and their actions are involved.

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